Ethanol, biodiesel plants bring jobs -- and optimism -- to rural Texas

BYLINE: William Pack, San Antonio Express-News

Nov. 11--A quiet Panhandle ranching town of nearly 15,000, Hereford is bracing for change.

Two ethanol plants, each capable of producing 100 million gallons of the clean-burning fuel a year, are moving toward completion.

"Certainly it will provide jobs for us, and who knows what other business might take off from this?" said Hereford State Bank President Mike Mauldin. "I'm excited about it."

Biodiesel plants are not often as large as ethanol plants, but they too have awakened dreams of prosperity in places like Gonzales, where a 3-million-gallon-capacity biodiesel plant is open. And between Houston and Victoria, the 1,200 members of the Farmer's Co-op of El Campo have voted to be partners in a 5-million-gallon biodiesel plant.

Not only will the plant boost the market for cottonseed oil and soybean oil produced in the area, it also will provide a hedge against high diesel-fuel costs, said Jimmy Roppolo, the co-op's general manager.

"It should help with their margins," Roppolo said. "Our board has been supporting it unanimously."

Anticipation is growing in rural communities across the state as the biofuels industry takes flight. Its growth can strengthen crop prices because the industry depends on commodities like corn, grain sorghum and soybean to convert into fuel, and it can bring new wealth to communities through the construction activity and jobs it generates.

Robert Wood, assistant commissioner for rural economic development at the Texas Department of Agriculture, said the 30 to 60 jobs a typical ethanol plant creates may not mean much to a big city like Houston, but it would have a real impact on a town of 2,500.

A Texas A&M University study said an 80 million-gallon ethanol plant could produce 1,400 associated jobs over time. The overall economic boost provided by that size of a plant could reach $400 million, including $41 million in increased household income annually once the plant begins operation.

There are no certain remedies for the problems facing rural areas, but ethanol and biodiesel plants can be "a huge cornerstone for us to build on," Wood said.

"It will play a role in energizing rural America," said Bryan Daniel, the U.S. Department of Agriculture's state director for rural development. "I look at it and think there are some real opportunities here." The opportunities exist because biofuel facilities, particularly ethanol plants, are drawn to rural areas. Development costs are often cheaper there, and they have access to agricultural markets both for the crops they use to produce alternative fuel and the byproduct they hope to sell.

Last year, according to the Renewable Fuels Association, dry mill ethanol refineries, which are more popular than wet mill plants, produced 9 million metric tons of distillers grains, a valuable feed supplement for livestock.

Panda Ethanol of Dallas had an additional reason to choose Panhandle sites in Hereford, Muleshoe and Sherman County for 100 million-gallon ethanol refineries.

Those refineries will produce fuel from corn and sorghum, but the steam needed to pull the starch out of those products will be generated by gasifying as much as 1 billion pounds of cattle manure at each plant. The Panhandle sites provided the company with the concentration of cattle it needed, said Panda spokesman Bill Pentak.

Since the Panda plant will use cattle manure and sell cattle feed, it is "literally using both ends of the cow," said Matt Hartwig, spokesman for the Renewable Fuels Association. "It's almost a perfect cycle." White Energy, also of Dallas, has 100 million-gallon ethanol plants under construction in Hereford and Plainview. Two additional ethanol plants, one with a 40 million-gallon-per-year capacity and another with a 30 million-gallon capacity, are in final design in Dumas and the Levelland area, both in the Panhandle.

Those plants will mark the first real entry of Texas into ethanol production, a field that has grown from the early 1980s, when less than 200 million gallons of the fuel was produced, to today's production expected to near 5 billion gallons.

Texas already has 13 biodiesel plants operating capable of manufacturing almost 100 million gallons of the fuel, the National Biodiesel Board reports. That makes Texas one of the top two states in productive capacity, said board spokeswoman Jenna Higgins.

Laredo, Poteet, Giddings and Gonzales are sites of operating biodiesel plants, according to board records. There are eight other Texas sites where biodiesel is looking to expand.

Wood, at the state Agriculture Department, said the number of ethanol and biodiesel plants could double in the next five years if crude oil prices stay high and concerns about energy security increase.

"A lot of Americans would rather support farmers in the Midwest than oil barons in the Middle East," said Craig Stevens, a U.S. Department of Energy spokesman.

But he and other interests know that more research, investment and determination will be needed to reach the administration's goal of supplying 30 percent of the nation's fuel needs from alternative sources by 2030. Less than 5 percent of fuel needs are provided by those sources now.

Steve Gens, who is heading a West Texas A&M University initiative that is studying biotechnology's link with agriculture, said that with the right strategy, America's farmers can become the "new Saudi Arabian oil sheiks."

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